Company Car Tax For Electric Vehicle
The overhaul of the company car tax system in 2020 has made electric vehicles more affordable in the UK. Due to lower CO2 emissions, electric cars are enjoying tax incentives since 2002. Furthermore, different countries are now aware of the requirement of these eco-friendly vehicles to ensure the cleanest environment. Here we are trying to explore all the details you need to know about company car tax for electric vehicles.
About 900,000 company car drivers in the UK. Additionally, the government is also trying to steer them into the most efficient vehicles through effective company car schemes. Now fueling the subsequent dash for diesel becomes easy for electric car users. The creation of an early market for plug-in hybrid cars was another way to make electric vehicles the most affordable for common people.
How to calculate company car tax
There is some Autocar company car tax calculator that can help you to calculate the exact tax for every model. The taxable amount mainly depends on the car you choose. For example, if your employer allows you to use a car for a private journey, it should be classified as benefit-in-kind (BIK). It will be categorized into workplace perks and cut the tax from your monthly salary. This process is cheaper than buying or leasing a vehicle privately.
Tax value and CO2 emissions
The rate of CO2 emissions is the main determining factor to measure the taxable value. If you purchase a car with higher CO2 emissions, you have to pay a progressively larger amount of tax. In contrast, the lowest-CO2 vehicles charge the least tax for electric car users.
Moreover, the taxable value for electric cars with 0g/km CO2 emissions is just 1% of the list price. These cars are known as ultra-low tax bands for EVs. After April 2022 they will be charged 2% for the next 3 financial years.